Montgomery v. Polk County

278 N.W.2d 911, 1979 Iowa Sup. LEXIS 934

• Court: Supreme Court of Iowa
• Decided: May 30, 1979
• Docket: 62298
• Status: Published

Opinions

• UHLENHOPP, Justice.

The decisive issue in this appeal is whether the discovery rule applies to cases under our Municipal Tort Claims Act, chapter 613A, The Code 1977. See Chrisehilles v. Griswold, 260 Iowa 453, 150 N.W.2d 94 (1967).

I. Although defendant Polk County, Iowa, presses other evidence to our attention, the following may be taken as established for purposes of the appeal. On November 11, 1976, officers arrested Linda Brewer on a charge of possession of a controlled substance with intent to deliver, and cash bail was set at $2000. Plaintiff May Montgomery, Brewer’s friend from Omaha, Nebraska, posted the bail, took a receipt from the police, and obtained Brewer’s release. The next day personnel of the clerk of court issued a receipt to Brewer for $2000.

At some point the district court sustained a motion to suppress evidence in the criminal case against Brewer.

On December 16, 1976, in writing, Brewer assigned the cash bail to Attorney Robert A. Wright. On January 17, 1977, the assignment was filed with the clerk.

On January 18, 1977, on the recommendation of the prosecutor, the district court dismissed the criminal charge against Brewer. On the same day the clerk paid the cash bail of $2000 to Mr. Wright.

According to her testimony, Montgomery came to Des Moines in May 1977 and for the first time learned that the charge against Brewer had been dismissed and the cash bail had been paid to Mr. Wright. She conferred with the county attorney, who suggested that she consult private counsel.

On September 29, 1977, Montgomery commenced the instant action to recover $2000 and interest from Polk County and the City of Des Moines, Iowa. She later dismissed the case as against the City.

After trial the court held for the county on the ground that Montgomery sued too late, citing section 613A.5. The court certified the case for appeal, Iowa R.App.P. 3, and Montgomery appealed.

II. The way Montgomery presented her claim is important to the analysis of the case. She did not proceed against the clerk for failure to pay over on demand. Instead she proceeded under the Municipal Tort Claims Act against the public body for the clerk’s negligence in paying the money to the wrong person on January 18,1977. The appropriate decisions therefore are those dealing with the Municipal Tort Claims Act.

Under section 613A.1(1) of our Municipal Tort Claims Act, “municipality” includes a county. Section 613A.5 of the act provides:

Every person who claims damages from any municipality or any officer, employee or agent of a municipality for or on account of any wrongful death, loss or injury within the scope of section 613A.2 or section 613A.8 [imposing tort liability and duty to defend] or under common law shall commence an action therefor within six months, unless said person shall cause to be presented to the governing body of the municipality within sixty days after the alleged wrongful death, loss or injury a written notice stating the time, place, and circumstances thereof and the amount of compensation or other relief demanded. Failure to state time or place or circumstances or the amount of compensation or other relief demanded shall not invalidate the notice; providing, the claimant shall furnish full information within fifteen days after demand by the municipality. No action therefor shall be maintained unless such notice has been given and unless the action is commenced within two years after such notice. The time for giving such notice shall include a reasonable length of time, not to exceed ninety days, during which the person injured is incapacitated by his injury from giving such notice.

Montgomery did not sue within six months after the clerk “negligently” paid Wright, nor did she give notice within sixty days after the clerk paid Wright so as to extend the time to sue to two years. She was not incapacitated by injury so as to extend the sixty days to give notice.

III. Montgomery therefore faces the limitation in section 613A.5. We need not speculate about the various avenues she might have taken, endeavoring to avoid that section. She selected her own route and set it out in her brief. She proceeds as follows: (1) the county was negligent in paying the money to the wrong person, (2) this breach of the duty of care occurred on January 18, 1977, when the county paid Mr. Wright, (3) Montgomery did not discover the breach until May 1977, and (4) her cause of action against the county dii not accrue until the discovery, citing Chrischilles v. Griswold, 260 Iowa 453, 150 N.W.2d 94 (1967). She states in her brief:

When the Defendant released and paid over the Plaintiff’s money to another person, notwithstanding the fact that the Defendant had given Plaintiff a receipt acknowledging receiving the money from Plaintiff, the Defendant fell short in its duty of care to Plaintiff and she was damaged. (Emphasis added.)

She then spells out her reliance on Chrischilles in this language:

After she became aware that the Defendant had erroneously paid the money over to another person, the Plaintiff was then faced with an election: whether to affirm the contract which Plaintiff and Defendant entered into when she deposited the bail money, thereby waiving the tort, and proceed in an action ex contrac-tu; or, abandon the contract and proceed in an action ex delicto. Electing to proceed ex delicto, the question becomes: when did Plaintiff’s cause of action accrue ?

The contract which gives rise to this lawsuit was executed on November 11, 1976, when the Plaintiff posted the Two Thousand Dollars ($2,000.00) cash bond and received a receipt acknowledging the money from the Defendant. Plaintiff did not become aware of Defendant’s negligence until on or about May 1, 1977, and this is the date on which Plaintiff’s cause of action accrued. “The general rule is that a cause of action accrues when the aggrieved party has a right to institute and maintain a suit.” Chrischilles v. Griswold, 260 Iowa 453, 150 N.W.2d 94, 99 (1967). Plaintiff did not become aware of Defendant’s negligent performance and the consequent injury to her interest until on or about May 1, 1977. This is the first time Plaintiff was aware that the money she had deposited with the Defendant had been paid to someone else. This is the first time Plaintiff was aware that she had received an injury to her interest. This is the first time she could have pursued an action to a successful result.

It is true that Plaintiff’s injury is traceable to a negligent act of Defendant on or about January 19, 1977. However, Plaintiff was unaware of any injury to her interest until May 1, 1977, and it was not until this date that her cause of action accrued. “If an injured party is wholly unaware of the nature of his injury and the cause of it, it is difficult to see how he may be charged with a lack of diligence or sleeping on his rights.” Chrischilles v. Griswold, 260 Iowa 453, 150 N.W.2d 94, 100 (1967). (Emphasis added.)

She continues in her brief:

As summarized in Chrischilles v. Griswold, id. the recent trend has been toward “the discovery rule.” This rule simply stated is that a statute does not commence to run until the date of discovery, or the date when, by the exercise of reasonable care, Plaintiff should have discovered the wrongful act. “The question in any given case is not, what did Plaintiff know of the injury done him? but, what might he have known, by the use of the means of information within his reach, with the vigilance which the law requires of him? We now believe the better rule to be that a cause of action based on negligence does not accrue until Plaintiff has in fact discovered that he has suffered injury or by exercise of reasonable diligence should have discovered it and are persuaded the rationale of the discovery doctrine should be adopted.” Chrischilles v. Griswold, id., [150 N.W.2d] 100 (emphasis added). Applying the discovery rule to the facts of this case, Plaintiff discovered that she suffered an injury, that the Defendant had breached its duty of care to her and her money would not be returned to her on or about May 1, 1977. This is the date that the Statute of Limitations given by Code of Iowa § 618A.5 began to run, thereby making Plaintiff’s Petition timely filed, and not barred as held by the Trial Court.

These arguments in Montgomery’s brief are in line with paragraphs four and five of the negligence count of her petition:

4. That as a result of the receipt of the cash bond by the Defendants, the Defendants owed a duty of care to the Plaintiff to see that said cash bond was returned to the Plaintiff once the conditions of bail were met by one Linda Brewer.

5. That Defendants breached that duty of care owed to the Plaintiff when on or about January 18, 1977, said cash bond was negligently released to someone other than the Plaintiff.

The county’s brief contains thfe same understanding of the claim Montgomery makes — -that the “cause of action did not accrue until plaintiff ‘discovered’ her injury on May 5, 1977.” (Emphasis added.)

IV. Thus Montgomery posits that the county breached its duty “when on or about January 18, 1977, said cash bond was negligently released to someone other than the Plaintiff.” Legally, she could have sued then. She places her reliance on the contention that her cause of action did not “accrue” until her later discovery. She thus squarely presents the question of whether the Chrischilles discovery rule applies under section 613A.5.

Chrischilles itself was a private party, common-law negligence action to which the general statute of limitations applied. That statute starts time running when causes of action “accrue.” § 614.1, The Code. Section 613A.5, however, does not use that term. Nor does it use a similar term such as “arise.’-’ Such terms give limitations statutes some elasticity as demonstrated by the cases we will consider, for a body of court-made law exists, including the discovery rule itself, as to when a cause of action “accrues” or “arises.” 51 Am.Jur.2d Limitation of Actions §§ 107-37 (1970); 54 C.J.S. Limitations of Actions §§ 108-98 (1948). Section 613A.5, however, provides that a person who claims damages for wrongful death, loss, or injury “shall commence an action therefor within six months” unless the sixty-day notice is given. (Emphasis added.) The sixty days for notice also runs “after the alleged wrongful death, loss or injury.” Did the legislature intend by section 613A.5 that actions must be brought within the time therein stated, or did it intend, as Montgomery claims, that time runs from later discovery?

A. We have the duty to construe section 613A.5 in accordance with what we deem to be the intent of the Iowa General Assembly in enacting it. Accordingly we have consistently stated that a claimant must comply with section 613A.5 as part of a statute of creation; the legislature could open the door to the extent it chose to do so. Dealing with contribution and indemnity, we drew several conclusions as to legislative intent in the case of Boyle v. Burt, 179 N.W.2d 513, 517 (Iowa 1970). The fifth conclusion, with respect to section 613A.5 notices, was that the legislature intended to allow “specified time variances for the giving of claim notices only with regard to incapacity or death due to injury, not here applicable.” (Emphasis added.)

Dealing with the extension of time for incapacity, we stated in Sprung v. Rasmussen, 180 N.W.2d 430, 433 (Iowa 1970):

Chapter 613A created a new right of action — one that was not available at common law nor available elsewhere by statutory authority, and therefore, while cases interpreting other limitation statutes are helpful, they do not control here. Truly chapter 613A, and particularly the section which we are interpreting here, section 613A.5, might be called a statute of creation, rather than a statute of limitation. The statute creates a new liability and provides for methods of enforcing the same, and by its terms fixes the time within which action for recovery may be commenced. It being a statute of creation, the commencement of the action within the time the statute fixes is an indispensable condition of the liability and of the action permitted. The time element is an inherent element of the right so created, and the limitation of the remedy is likewise a limitation of the right. (Emphasis added.)

Dealing with the proper manner of raising the notice issue and quoting from Boyle, we stated in Bennett v. Ida County, 203 N.W.2d 228, 236 (Iowa 1972): ‘A lapse of a statutory period operates, therefore to extinguish the right altogether.” (Emphasis in Boyle.)

Dealing with malpractice, we adverted to the discovery rule and stated in Flynn v. Lucas County Memorial Hospital, 203 N.W.2d 613, 616 (Iowa 1973):

The discovery rule is that a cause of action based upon negligence does not accrue until plaintiff has in fact discovered his injury or by exercise of reasonable diligence should have discovered it. Chrischiiles v. Griswold, 260 Iowa 453, 463, 150 N.W.2d 94, 100 (1967); Prosser, Law of Torts § 30 at 144 (Fourth Ed. 1971).

It had its genesis in the theory a statute of limitations should not defeat the remedy of one who has not slept on his rights but has simply been excusably unaware of his cause of action. Flanagan v. Mount Eden General Hospital, 24 N.Y.2d 427, 301 N.Y.S.2d 23, 248 N.E.2d 871 (1969), and citations. However, unlike a true statute of limitations, the notice requirements of § 613A.5 are considered a legislative restriction of the right rather than the remedy. Rules affecting ordinary statutes of limitations do not necessarily apply. Sprung v. Rasmussen, 180 N.W.2d 430 (Iowa 1970). Compare Schaefer v. Mayor and Council of Athens, 120 Ga.App. 301, 170 S.E.2d 339 (1969), with.. Boulder City v. Miles, 85 Nev. 46, 449 P.2d 1003 (1969).

Dealing with constitutionality of the statute, we stated in Shearer v. Perry Community School District, 236 N.W.2d 688, 692 (Iowa 1975):

In the light of our interpretation of § 613A.5 we are unable to agree with plaintiffs that said section arbitrarily and capriciously infringes upon or cuts off vested rights in violation of constitutional guarantees. Instead, we conclude the right of action provided by chapter 613A is co-extensive with, and no broader than, the notice requirement of § 613A.5. In other words, it might be said compliance with the notice requirement is a condition precedent to the maintenance of an action for compensation for torts committed by governmental subdivisions. See 1 Am.Jur.2d Actions § 81, p. 610. (Emphasis added.)

Dealing with the sixty-day notice, we stated in Lattimer v. Frese, 246 N.W.2d 255, 257 (Iowa 1976): “The statute mandates the notice and the clear tenor of our decisions is that proof of timely giving of the notice is part of a claimant’s case.”

Dealing with the constitutionality of the limitation on the extension of time for an incapacitated person, we stated in Harryman v. Hayles, 257 N.W.2d 631, 636 (Iowa 1977):

We have not overlooked the fact that § 613A.5 is a statute of creation rather than a statute of limitation. In such cases, the general rule is that the legislature may attach its own conditions to an exercise of the rights granted. Bennett v. Ida County, 203 N.W.2d at 235-236; Sprung v. Rasmussen, 180 N.W.2d at 433. Our conclusion here does not violate that principle, which surely cannot be extended to include authority to impose unconstitutional conditions on the exercise of the rights granted. See American Pipe & Construction Co. v. Utah, 414 U.S. 538, 94 S.Ct. 756, 38 L.Ed.2d 713, 730 (1974).

These pronouncements are in line with the summary pertaining to statutes of creation found in 51 Am.Jur.2d Limitation of Actions § 15, at 599-600 (1970):

Statutes of h'mitation are to be distinguished from statutes which create a right of action not existing at common law and restrict the time within which action may be brought to enforce the right. Although the general rule is that a true statute of limitations extinguishes only the right to enforce the remedy and not the substantive right itself, the limitation of time for commencing an action under a statute creating a new right enters into and becomes a part of the right of action itself and is a limitation not only of the remedy but of the right also; the right to recovery depends upon the commencement of the action within the time limit set by the statute, and if that period of time is allowed to elapse without the institution of the action, the right of action is gone forever. The statute is an offer of an action on condition that it be commenced within the specified time, and if the offer is not accepted in the only way in which it can be accepted, by a commencement of the action within the specified time, the action and the right of action no longer exist and the defendant is exempt from liability.

See also 57 Am.Jur.2d Municipal, School & State Tort Liability § 60, at 69 (1970); Petz, Survey of Iowa Law — Some Tort-Related Statutes, 23 Drake L.Rev. 603, 616 (1974).

B. The present case is to be distinguished from those in which negligence occurred at one time but the injury, the breach, did not occur until later. Montgomery does not claim that the injury did not occur when the clerk paid the money to Mr. Wright; on the contrary, she founds her case on negligence and claims January 18 is when the breach occurred. Rather, she claims her cause of action did not “accrue” until later discovery, notwithstanding that section 613A.5 does not start time running from the time causes of action “accrue.” Thus the cases are inapplicable in which negligence occurred at one time — such as failure to label a bottle — but the injury occurred later, as when the contents of the bottle were consumed. Cf. Palsgraf v. Long Island Railroad, 248 N.Y. 339, 341, 162 N.E. 99, 99 (1928) (Cardozo, C. J., “ ‘Proof of negligence in the air, so to speak, will not do.’ Pollock, Torts (11th Ed.), p. 455.”). In such cases discovery of the injury does not occur later; the injury occurs later.

An illustration from the municipal tort field is Boulder City v. Miles, 85 Nev. 46, 49, 449 P.2d 1003, 1005 (1969). There a city bought and graded a tract of land and formed a subdivision, but negligently failed to compact the soil properly. The plaintiffs bought a lot and built a house on it. Later the soil subsided as a result of the city’s earlier inadequate compacting, damaging the plaintiffs’ house. The court held that the plaintiffs could sue “when the forces wrongfully put in motion produce an injury.” Hence time ran from the point at which the soil subsided. See also Turner v. Staggs, 89 Nev. 230, 510 P.2d 879, cert. denied, 414 U.S. 1079, 94 S.Ct. 598, 38 L.Ed.2d 486 (1973). Such is not Montgomery’s case. On her theory of negligent payment to the wrong person, she was hurt when that event occurred. The negligence and the injury were simultaneous.

By way of analogy, section 613A.5 covers “wrongful death” as well. If next-of-kin do not learn of a decedent’s death until several months later, the “death” would not have occurred at that later time; it occurred when the decedent died. Similarly in this case involving a tort claim for negligently paying money to the wrong person, the “injury” occurred when the payment was made. The use of the word “injury” in the last sentence of section 613A.5 also shows it has its ordinary signification: “during which the person injured is incapacitated by his injury from giving such notice.” Montgomery does not claim otherwise. She claims that notwithstanding, her “cause of action accrued” on later discovery, although section 613A.5 is not couched in terms of accrual of causes of action. We thus return to the question of the applicability of the discovery rule to a limitations statute which speaks in terms of any “wrongful death, loss or injury.”

C. Some jurisdictions have ameliorative language or provisions in their tort-claims limitations statutes. Thus tort claims against the federal government are barred after two years from the time the claim “accrues.” 28 U.S.C. § 2401(b) (1977) (with another provision not relevant here). This terminology has enabled the federal courts to hold that malpractice claims do not accrue until “the claimant [has] discovered, or in the exercise of reasonable diligence should have discovered, the acts constituting the alleged malpractice.” Quinton v. United States, 304 F.2d 234, 240 (5th Cir. 1962). See also Kubrick v. United States, 581 F.2d 1092 (3d Cir. 1978); Toal v. United States, 438 F.2d 222 (2d Cir. 1971). These decisions are in line with the discovery rule on the time malpractice actions accrue under general statutes of limitations. 61 Am. Jur.2d Physicians, Surgeons & Other Healers § 183 (1972); cf. 70 C.J.S. Physicians & Surgeons § 60, at 985 (1951) (foreign objects rule).

New Jersey employs both the term “accrual” and an extension clause. Bell v. County of Camden, 147 N.J.Super. 139, 141, 370 A.2d 886, 887-88 (1977) (per curiam) (statute provides: “ ‘[A] claim shall be presented . . . not later than the ninetieth day after accrual of the cause of action,’ ” but “ ‘[a] claimant who fails to file notice of his claim within 90 days . may, in the discretion of a judge . . ., be permitted to file such notice at any time within 1 year after the accrual of his claim provided that the public entity has not been substantially prejudiced thereby.’ ”). Under this legislation, the New Jersey Superi- or Court exercised its discretion to permit a patient to file her claim for malpractice within one year after she discovered the injury, although more than a year from the time the injury occurred. Torres v. Jersey City Medical Center, 140 N.J.Super. 323, 326, 356 A.2d 75, 77 (1976). The court stated:

Although our courts have not had occasion to determine when a medical malpractice claim accrues within the meaning of the Tort Claims Act, the meaning of accrual [emphasis in original] within the context of the Statute of Limitations (N.J.S.A. 2A:14 — 2) is well established. Lopez v. Swyer, 62 N.J. 267, 300 A.2d 563 (1973); Fernandi v. Strully, 35 N.J. 434, 173 A.2d 277 (1961). The use of this term by the Legislature in the light of the judicial application of the discovery rule to the same term used in the Statute of Limitations is significant. By the use of this term the Legislature intended that it should have the same meaning and be applied in the same fashion as in the Statute of Limitations. Comment to 59:8-1, Report of the Attorney General’s Task Force on Sovereign Immunity, 230 (1972). (Emphasis added.)

In Bell the New Jersey Appellate Division held that a court is powerless to extend the time after the lapse of the year from the time a cause of action does accrue.

See also Beary v. City of Rye, 44 N.Y.2d 398, 406 N.Y.S.2d 9, 377 N.E.2d 453 (1978) (statutory grounds for extending time).

With regard to the discovery rule, Idaho appears to have gone the farthest; it has embodied that rule itself into its state tort claims statute. The Idaho Supreme Court quoted the statute in Newlan v. State, 96 Idaho 711, 713, 535 P.2d 1348, 1350, appeal dismissed, 423 U.S. 993, 96 S.Ct. 419, 46 L.Ed.2d 367 (1975): “ ‘Filing claims against state — Time.—All claims against the state arising under the provisions of this act shall be presented to and filed with the secretary of state within one hundred twenty (120) days from the date the claim arose or reasonably should have been discovered, whichever is later.’ ” In that case the parents were aware of their son’s fatal accident but they were unaware that they had a case until they consulted an attorney. The court held the latter fact did not extend the time under the discovery rule. The court later held that additional injuries discovered after an incident do not invoke the discovery rule. Ralphs v. City of Spirit Lake, 98 Idaho 225, 228, 560 P.2d 1315, 1318 (1977). Cf. Schaefer v. Mayor & Council of City of Athens, 120 Ga.App. 301, 170 S.E.2d 339 (1969):

D. Under our decisions section 613A.5 is part of a statute of creation. Time to sue or to give the sixty-day notice runs from the wrongful death, loss, or injury unless the sixty-day notice is timely given, and then from the notice. When the legislature abolished sovereign immunity in the municipal tort claims field, numerous statutes existed throughout the country, some of them containing ameliorative clauses of the kind we have illustrated. The legislature saw fit to include an exception in section 613A.5 for the person who is incapacitated by injury from giving notice, but it did not see fit to insert other ameliorative language found in some other jurisdictions. Presumably the legislature wrote the statute as it desires the law to be; our responsibility is to apply the statute as enacted. We conclude that the trial court decided the case correctly.

AFFIRMED.

All Justices concur except McCORMICK, LARSON, JJ., REYNOLDSON, C. J., and HARRIS, J., who dissent.